Trends in U.S. Farm Exports
U.S. agricultural exports are an important component of U.S. farm income. This has been particularly true since the early 1970's. U.S. ag exports have increased by more than 2.5 times between 1976 and 2002, according to a recent U.S. Department of Agriculture study. U.S. farm exports are typically divided into three broad categories: Bulk commodities are those exports of traditional farm commodities such as corn, soybeans or tobacco. A second category is High(er) Value Products (HVP) which includes processed meats and grain products. Last are Semi-processed High Value Exports which includes such things as feeds, hides and oilseed products.
Much of the percentage gain in U.S. farm exports during the past thirty years have been HVP products, and not the typical bulk commodities we often think of when we think of farm exports. Exports of High Value and Semi Processed ag products exceeded bulk exports back in 1990. Bulk exports, while somewhat volatile from year to year, have been relatively flat from a trend perspective. In fact, bulk exports that comprised 70% of total U.S. agricultural exports back in the mid 1970's now represents about 35% of the total.
A number of reasons underlie the growth in agricultural exports. First, U.S. farm policy has become more flexible in allowing production to adjust to demand. Second, the value of the U.S. dollar has been generally favorable for expanded U.S. exports. Third, trade liberalization agreements such as NAFTA have facilitated trade growth, particularly in our exports to Mexico and Canada. The U.S. has also been facing more competition for bulk commodities around the world especially from South America and parts of the former Soviet Union.
One result of these changes is that Asia and the Americas are now the largest customers for U. S. exports replacing Europe. Again, a significant percent of the growth in exports to these countries have been farm products that have had some degree of processing. Canada is our largest export customer, followed by Japan, but Mexico is not far behind. Not all the growth in export value has been to just our largest trading partners. We’ve also seen growth to Turkey, Indonesia, Thailand and China, among others. The largest percentage gains in U.S. export values during the past twenty years have been in fresh and frozen beef and veal, followed by soybeans and prepared or preserved vegetables.
In summary, agricultural exports are an important component of U.S. farm income. But the nature of our exports has changed in the past several decades with now more emphasis on exporting agricultural commodities that have been processed to some degree.
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For additional information, please contact Larry Jones.